Tesla, TSLA & the Investment World: the Perpetual Investors' Roundtable

[Right_Said_Fred]

Decision point. I have an immediate need for cash within next 1 month (~10% of my current TSLA holdings). Can't decide if I should sell today/tomorrow, next week post split, or closer but before the BatteryDay. Only thing stopping me from selling right now is S&P500 uncertainty. I know better than trying to time the local top, and won't complain if stock keeps going up after I sell. But every extra bits help, and I also don't want to be in situation of having to sell 15% instead of 10% for my needs, as those are fixed... Decisions, decisions...

Why not sell calls? One call 2200 for 25 September will net you $21,500 in premium. It only obliges you to sell 100 shares for €2200 each on that date, if the stock is higher. If it is lower, you get to keep them. Under both scenarios you get to keep the premium. Ofcourse you can choose to sell more calls.

 

[OrthoSurg]

Favorite food: bears

View attachment 581291

Bears are not even running for their lives.
They are sitting, screaming on Twitter, yelling on youtube videos, reading and writing FUD articles every day of their lives.

 

[smorgasbord]

Wasn't your main argument that Wall St. is short sighted? And that therefore it could dip, because it'll take the company's fundamentals more than Wall. St.'s short sighted 1-2 year investment horizon to catch up to the current SP of $2,000?

I'm pointing out that you don't have to look that far into the future (just a few years beyond these factories) to come up with a far higher price target than today's stock price. I think a 50x EBIT valuation is still more than fair for TSLA at that point in time considering it'll still have a lot of growth potential ahead of it, so I can use that 50x EBIT multiple to make up a "post-Shanghai/Berlin/Austin" price target for TSLA. Analysts usually discount these future valuations to some extent, which I did not do, but even after discounting that $4,600 to today, you should still end up with a price target well north of $2,000, even if you only look 3-4 years into the future.



I disagree with this very strongly. Tesla is gathering data at lightning pace:

• For the sake of this example, assume Tesla creates safer than a human FSD in late 2022.
• Tesla should have ~4M Hardware 2+ vehicles on the road at this point in time.
• Let's say 25% of them have the FSD package, so 1M.
• Let's say the average vehicles travels ~10k miles per year, so these vehicles will travel 10B miles total each year collectively, still under supervision.

After 1 year, Tesla now has 10B miles it can take to regulators. Provided this data confirms that Tesla's self-driving vehicles are indeed safer than a human by a significant margin, 10B miles will go a very long way towards convincing regulators. That should be in the ballpark of what will undeniably prove that Tesla's FSD system saves lives, and why wouldn't regulators approve something that saves lives?

This is imo Tesla's biggest advantage in the race towards a safer than a human, regulatory approved FSD system. It is the only company that has the ability to collect enough data to prove to regulators that their system saves lives.



I don't think so, but time will tell.



Agree with you on Battery Day.

Agree with you that if there's a serious drop, it'll be aggressive, but imo much more so due to delta hedging than due to a handful of stop losses.

Disagree with you on Tesla's fundamentals and valuation.

I also think we have different views of TSLA's stock price over the coming years. Obviously it's not going to 10x every 12 months. And I plan to severely deleverage soon and convert options to common stock, because I don't think the risk reward is there, and too much near term price appreciation is baked into options prices. However, I'd be surprised if it's under $2,000 12 and 24 months from now, and I believe it'll for the most part continue to slowly appreciate in value after it settles down a bit post S&P inclusion. I just don't know whether it will settle at $2,xxx, $3,xxx, or maybe even $4,xxx albeit quite unlikely.

• Yes, Mr. Market is typically limited to a couple years of vision. There are exceptions for some analysts and there are exceptions for some time periods. TSLA has both exceptions in full force now; I don't believe those will last.

• I disagree with using a 50X EBIT for some EBIT in the future as any kind of downside protection. AAPL has not always had a 32X EBIT, and indeed went years with a much lower multiple, even after the iPhone. That you use an even higher multiple to establish a properly discounted price target of $2000 for 3-4 years actually supports my point. TSLA is already 10% over that. There's no reason to believe that a black swan macro event (perhaps Covid vaccines failing or having serious side effects or China trade deals killed, etc.) or an execution hiccup, won't bring TSLA down precipitously. Hopefully not, but growing production at a 50% CAGR is not an easy task, especially for as large a company as Tesla has become. There are multiple factories under construction/expansion on multiple continents and the technology is rapidly evolving.

• As for FSD, I think we're mostly agreeing on the mechanics, so I don't get how you're disagreeing with me, except on regulatory approval timing. If FSD is "ready" in late 2022 as you said, you're then thinking a year's worth of data will be enough to convince regulators, but you're not taking into account how slowly those regulators will move. I put "ready" in quotes because this whole process won't be smooth. As we've seen, every time there's an accident on auto-pilot, it makes news. We don't know how many iterations of FSD being released it'll take for FSD to move into Beta, and then out of Beta, and then the data gathering on that version or later, and then submittal and then regulatory review, questions, demand for more data, demand for changes, etc. This is easily 2025 or even later. I suppose there are countries/jurisdictions that might be willing to move sooner, but any serious injury or worse on FSD will slow things down - look at what happened after the Uber/Phoenix death; something similar with FSD could easily cause a reset in your 1 year data gathering proof time period.

That said, I also think that even before regulatory approval people seeing the reality of FSD in the wild will give a boost to the stock price.

• I also don't know where TSLA will "settle" at, to use your description. You seem to agree that the possibility exists for a "serious drop" in the price, so wouldn't that drop be far below the price at which TSLA has settled? Do you disagree that such a drop in share price/valuation might last for a long time? As a long time TSLA shareholder, I feel like I've spent the majority of my time with TSLA being undervalued. I don't think those days are gone forever, and I don't think we're immune from it happening again.

As someone who strongly believes in Tesla, I have put my money where my mouth is. That said, I refuse to wear rose-colored glasses and somehow believe that the current positive alignment of business progress, analyst appreciation, supportive macro-environment, FOMO, S&P 500 inclusion, etc. will all last for years.

 

[Big Time]

 

[OrthoSurg]

do not buy on margin. that's just the stupid kind of greedy, introducing risk into a situation that is already rewarding like crazy.

Oh boy.
I will not tell you gown much TSLA shares I bought on margins.

 

[elasalle]

Sold a few shares at $2222.22. The value of my position keeps going up though.

Need to Sell some CC's, seeing Sept 22 4200 for $460 premium.
Don't want to sell shares outright. Also, other Verticals in place seems too profitable to want to close early.
(Took a small loss on Sept 20 2500-2600 CC. I had closed Sept 20 $3200 strikes and opened these when SP was < 1400 on the downturn thinking of labor day Bear raid)

(+ waiting till Friday though ... decisions, decisions)

 

[ggies07]

So I was reading this blog again to get familiar with everything one more time before tomorrow night's Neuralink demonstration and I noticed there IS a link between Neuralink and Tesla:

Neuralink and the Brain's Magical Future — Wait But Why

What does this action remind you of?

Action potentials move at between 1 and 100 meters/second. Part of the reason for this large range is that another type of cell in the nervous system—a Schwann cell—acts like a super nurturing grandmother and constantly wraps some types of axons in layers of fat blankets called myelin sheath.Like this (takes a second to start):

The inside of a cell rolled up!

 

[mejojo]

I hate/scared of using margin and I also have a wife who will divorce me if I do that. Both don't fit my RISK appetite

Margin is just a loan against your portfolio. It's not an "evil" loan, so long as you don't "gamble" the money.

 

[Krugerrand]

Serves them right for being so insular and stuck in their ways. Anyone with two brain-cells to rub together could see this coming end of last year, the SPY Committee could have easily made an exception for $TSLA and brought it into the index beginning of the year.

Anyway, who says they will actually bring us in? Maybe they create a new rule specifically to omit Tesla.

Who needs the S&P500 anyway, come to think of it??

Finally starting to come over to my side of the thinking line.

 

[StealthP3D]

I don't know about you guys, but I'm so sick of seeing tinfoil hat analysis of every Elon tweet. OMG, he said "Some people like tacos" Get it? Some People..Tacos. SP.T... S&P Thursday!!!"

I think it adds a bit of levity to the subject matter at hand. It's good to be able to laugh while contemplating something that is taken far too seriously by too many people.

I get suspicious feelings of those who get prickly so easily when most people are celebrating the strong share price performance.

 

[elasalle]

Oh boy.
I will not tell you gown much TSLA shares I bought on margins.

Margin was never for me, but to start my personal portfolio, I put my M3 and Solar Panel monies into the stock. I have already taken out the principal, and all House Money now & like 25-30% behind @Lycanthrope in this account.

 

[OrthoSurg]

• Yes, Mr. Market is typically limited to a couple years of vision. There are exceptions for some analysts and there are exceptions for some time periods. TSLA has both exceptions in full force now; I don't believe those will last.

• I disagree with using a 50X EBIT for some EBIT in the future as any kind of downside protection. AAPL has not always had a 32X EBIT, and indeed went years with a much lower multiple, even after the iPhone. That you use an even higher multiple to establish a properly discounted price target of $2000 for 3-4 years actually supports my point. TSLA is already 10% over that. There's no reason to believe that a black swan macro event (perhaps Covid vaccines failing or having serious side effects or China trade deals killed, etc.) or an execution hiccup, won't bring TSLA down precipitously. Hopefully not, but growing production at a 50% CAGR is not an easy task, especially for as large a company as Tesla has become. There are multiple factories under construction/expansion on multiple continents and the technology is rapidly evolving.

• As for FSD, I think we're mostly agreeing on the mechanics, so I don't get how you're disagreeing with me, except on regulatory approval timing. If FSD is "ready" in late 2022 as you said, you're then thinking a year's worth of data will be enough to convince regulators, but you're not taking into account how slowly those regulators will move. I put "ready" in quotes because this whole process won't be smooth. As we've seen, every time there's an accident on auto-pilot, it makes news. We don't know how many iterations of FSD being released it'll take for FSD to move into Beta, and then out of Beta, and then the data gathering on that version or later, and then submittal and then regulatory review, questions, demand for more data, demand for changes, etc. This is easily 2025 or even later. I suppose there are countries/jurisdictions that might be willing to move sooner, but any serious injury or worse on FSD will slow things down - look at what happened after the Uber/Phoenix death; something similar with FSD could easily cause a reset in your 1 year data gathering proof time period.

That said, I also think that even before regulatory approval people seeing the reality of FSD in the wild will give a boost to the stock price.

• I also don't know where TSLA will "settle" at, to use your description. You seem to agree that the possibility exists for a "serious drop" in the price, so wouldn't that drop be far below the price at which TSLA has settled? Do you disagree that such a drop in share price/valuation might last for a long time? As a long time TSLA shareholder, I feel like I've spent the majority of my time with TSLA being undervalued. I don't think those days are gone forever, and I don't think we're immune from it happening again.

As someone who strongly believes in Tesla, I have put my money where my mouth is. That said, I refuse to wear rose-colored glasses and somehow believe that the current positive alignment of business progress, analyst appreciation, supportive macro-environment, FOMO, S&P 500 inclusion, etc. will all last for years.

It will either rise, go down and go up again
Rise, stable plateau and rise again
Or rise till it beats all other companies actually existing on the market.

Keep it mind the only reason there are EVs in the street is because Tesla made it possible.
GM Killed the electric car. Tesla resurrected it on a mission.

 

[RichardL]

Happy to say that today we reached 10X my basis for my shares!

Special thanks to @bgarrett who spent a lunchtime at the Atascadero SC during the 2014 TMC meetup, educating me on the company in addition to my love of the car. Took a while to finally invest, but it has certainly been a ride. Thanks to all on this thread and board!

 

[Knightshade]

Margin is just a loan against your portfolio. It's not an "evil" loan, so long as you don't "gamble" the money.

Yup- for example I had one account with available margin where I had an odd number of shares (this was around 1500 SP)- so I bought enough to make it an even 100 on margin- then sold a well OTM covered call that'd way more than pay the margin loan cost over its own period- and meanwhile the margin-funded shares are up $700 each now- but even if they'd stayed flat (or even dropped a little) I'd be net profit on the use of margin there.

 

[Vad42]

Why not sell calls? One call 2200 for 25 September will net you $21,500 in premium. It only obliges you to sell 100 shares for €2200 each on that date, if the stock is higher. If it is lower, you get to keep them. Under both scenarios you get to keep the premium. Ofcourse you can choose to sell more calls.

I actually might do exactly that. There's other restrictions I have on trading that complicate some things, but yea, that's not a bad idea...

 

[Nocturnal]

Bears are not even running for their lives.
They are sitting, screaming on Twitter, yelling on youtube videos, reading and writing FUD articles every day of their lives.

I dipped back into Twitter to see what TSLAQ is up to. It is like watching people sit down for a 7 course meal on the Titanic. Unreal levels of insanity.

I think it adds a bit of levity to the subject matter at hand. It's good to be able to laugh while contemplating something that is taken far too seriously by too many people.

I get suspicious feelings of those who get prickly so easily when most people are celebrating the strong share price performance.

I like speculation, but sometimes a cigar is just a cigar.

 

[OrthoSurg]

Serves them right for being so insular and stuck in their ways. Anyone with two brain-cells to rub together could see this coming end of last year, the SPY Committee could have easily made an exception for $TSLA and brought it into the index beginning of the year.

Anyway, who says they will actually bring us in? Maybe they create a new rule specifically to omit Tesla.

Who needs the S&P500 anyway, come to think of it??

A rule to exclude TSLA.
That wouldn’t be surprising.
As they probably don’t understand the growth of that stock and think it might collapse and bring the S&P500 down with it....

 

[Todd Burch]

Stability followed by steps up. Seems whales are still buying the little dips.

 

[UnknownSoldier]

Are we guessing what JPow's speech is going to do to the markets today?

 

[ByeByeJohnny]

Going to work tonight. Doesn't happen to often these days after Covid hit. I'll make about 1/5 of what I've made from Tesla every single day for the last year on average. Good thing I really enjoy my work.